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We’ll take a wild guess that you’re here because you’re interested in claiming High-end TV tax relief. HTTR is a tax incentive offered by the United Kingdom government to television production companies.
In this article, we will provide you with a detailed guide to HTTR while answering all the key questions you might have regarding everything from eligibility to the process of claiming it.Check Your Eligibility
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HTTR is a UK government-funded tax incentive offered to companies that produce television programmes.
It is possible to claim a tax rebate through HTTR for costs incurred during all phases of making a television programme. That means that the incentive covers expenditure in pre-production, filming, and post-production.
Our team has lots of experience with HTTR and many other creative industry tax reliefs. TaxBite clients receive full transparency when working with us, and we are honoured to provide tax services to various companies and individuals.
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It is possible to claim a maximum of 20% of the production’s core expenditure.
As with many creative industry tax reliefs, the claim will be made against either 80% of the average core expenditure of the production or the claim will be for the actual UK core expenditure. The UK production company responsible for the production will only be able to claim the lower of the two figures.
The production company will receive a corporation tax rebate for a profit-making production. If the production makes a loss, the U.K. government will reimburse up to 25% of costs with a cash payment instead of tax credits.
Eligibility for high-end TV tax is dependent on strict criteria. It is imperative that the company satisfies the following factors:
First, the TV production company has to be involved in all stages of production, from the pre-production phase until the end of the post-production stage. The company needs to have significant input during all phases. That means production, decision-making, and planning need to be done by the television production company.
Second, a cultural test is required for any non-co-production. This test must be passed to be eligible for the tax relief scheme. In cases where it is a co-production, it must qualify as an official co-production. In both cases, the decision is down to the BFI.
Third, the programme must be a minimum of thirty minutes long. The programme’s cost must be, on average, at least £1m per hour. This has to be the programme’s minimum core expenditure.
It is essential that the production can be classified as a documentary, a comedy, or a drama.
Fourth, it has to be determined from the earliest stage of production that the programme will be shown to the public. Broadcasting the programme via a streaming service is acceptable.
Fifth, there is a minimum UK spend requirement. A tenth of the total core expenditure incurred must be spent within the United Kingdom. The minimum UK spend requirement is critical.
The HETV tax relief scheme allows production companies to claim on your total core expenditure. That means that the company’s core costs during the three phases of production – pre-production, principal photography, and post-production – can be reclaimed.
It’s important to note that non-production expenditure is not covered by this tax relief scheme. For example, any expenditure incurred on distribution cannot be reclaimed. This also goes for development expenditure.
To claim High-End TV tax relief, it is required that the relevant section of the CT600 form is completed before being submitted to HM Revenue & Customs. To successfully make a claim then, the following needs to be satisfied.
First, the production company must be registered as a UK Limited Company with Companies House.
Second, the TV project that the tax relief claim is for must have passed the British Film Institute’s cultural test for Britishness.
Third, costs need to be clearly categorised and listed. The UK expenditure and the EEA core expenditure need to be placed in separate categories.
Therefore, one section will simply focus on the UK expenditure, most likely accounted for in pound sterling, while the core expenditure incurred in the EEA will likely be in euros.
Fourth, HMRC requires that the production company provide a clear account of each programme’s profit-making or loss-making state. For tax purposes, each programme requires a separate application for tax relief. In certain cases, a series can be classified as a single programme, but this has to be accepted by HMRC before the claims process.
Fifth, once it has been determined if the TV project has made a profit or loss, then the application will tax reduction or a payable cash rebate.
Any TPC applying for HQ television tax relief must be part of the UK corporation tax net. If the company is not part of the UK corporation tax net, then it is advised that you apply for this status at as early a date as possible.
As previously stated, the production company has to be responsible for the TV project from the earliest stage until its conclusion. That means that the TPC has to have significant input during pre-production, principal photography, VFX (if there is any), post-production, and delivery of the project to the public.
The British Film Institute advises TPCs to incorporate as soon as possible, allowing the company to include more expenditure in the claims application.
As productions often require the sub-contracting of services provided or the use of loan-out companies, then these are acceptable, but this has to be clearly stated in the accounts.
It is acceptable for the company to be created by a non-UK parent company.GET STARTED
The cultural test for high-end television tax credit differs from that required for film tax relief. It is important to note that the process for film tax relief is different, as a film production company will occasionally make both high-end television and films.
The cultural test is administered by the British Film Institute. Unlike Film Tax Relief, for High-End TV tax relief, a points-based system is used for the cultural test. There is also no need for an interim certificate or final certificate, as is the process with tax relief for films.
There are 35 possible points that a project can receive. These points are administered in four separate categories: Cultural Content, Cultural Contribution, Cultural Hubs, and Cultural Practitioners.
The crew, cast, location, content, and cultural contribution will all be considered in each of these categories.
Agreements are in place for television co-productions between the United Kingdom and the following countries: Australia, Canada, New Zealand, Occupied Palestinian Territories, and Israel. These countries also have film co-production agreements with the United Kingdom.
Further to the agreements with the aforementioned countries, the United Kingdom is also signed up to the European Convention on Cinematographic Co-Production. To satisfy the terms of this agreement and be classed as an official co-production, production companies need to ensure the following is met:
Any elements of the production that occurs in the United Kindom need to be the whole responsibility of a U.K. production company. So, if principal photography takes place in the U.K., then a U.K. company will need to be in charge. This is the same for all UK elements of the production. It’s important to note that the persons carrying out the jobs don’t need to be British, but the activities need to occur in the UK.
This is the same for the countries with which the programme is co-produced. Each country requires corresponding production companies that will be responsible for any production activities taking place in that country.
The number of tax credits that the production receives from each government will depend on the amount of work done in each country. For example, if a short amount of principal photography is all that occurs in one country, then only a small amount of funding will be able to be reclaimed.
The high-end television programme will be deemed an official co-production if these elements are satisfied.
As previously stated, a TPC has official recognition from the BFI as long as it satisfies the following criteria:
The company needs to be registered for corporation tax in the United Kingdom.
All activities taking place in the United Kingdom, from the earliest stage of production until delivery to the audience, must be the company’s responsibility.
It is no issue for the TPC to subcontract or to use loan-out companies as long as this information is provided to HMRC when applying for top-end television tax relief.
It is essential that the production is intended to be broadcast to the public, which includes streaming online.
In some cases, there can be an element of doubt related to if the production is designed for broadcast or not. On these occasions, then the following has to be taken into account:
If the TPC has made a detailed financial plan that expressly shows that broadcasting the programme was the intention, then this will be seen favourably.
It is also beneficial if the programme is evidently one that is of a style and/or production format that tends to be broadcast.
Excluded programmes might be those that do not resemble standard television in any way. This can be the case with more experimental works, but other tax reliefs are available for such programmes. For example, cartoonists may wish to consider Animation Tax Relief.
Other programmes that are clearly not intended for broadcast to the general public are those made for training purposes, advertisements, and promotional material.
If artistic performance – such as acting – has been paid for at the standard rate for a broadcasted programme, then that will also show that the intention had been to broadcast.
It is also useful if there was a discussion at the early stages between producers and broadcasters. If subjects such as a broadcast hour or slot length had been spoken about, then that will also be seen favourably.
A theatrical release rather than a broadcast would not count towards the eligibility of the production.
There are many benefits of tax relief for high-end television. Two particularly beneficial areas are the size of the claim a TPC can make and the deductions that the company can make. Let’s look at both more closely.
It is possible to claim up to 80% of the UK qualifying production expenditure. There is no limit on the relief payable in terms of pounds. Therefore, the more you pay, the more you can get back.
If all the criteria explained in this article are satisfied, then 80% of the UK qualifying production expenditure will be reclaimed.
Another benefit of high-end TV tax relief is that deductions allow you to lower your corporation tax bill.
Depending on if the project makes a loss or a profit, then deductions can be used for further tax relief.
Our team of chartered accountants are keen to help you with your tax relief claims. Contact us below.Are You Eligible?